Crude up Wednesday on improved sentiment

Crude oil prices were higher Wednesday on better sentiment regarding economic conditions in Europe after government bond auctions by several nations in the region drew good demand, and after equities markets in Europe and the US made gains after yesterdays declines.

October contracts for West Texas Intermediate crude had added 85 cents to $74.94 per barrel in afternoon trade on the New York Mercantile Exchange, while Brent crude was lately up 66 cents to $78.40 per barrel on the ICE Futures Europe exchange in London.

Nymex October gasoline futures were 3 cents higher to $1.96 per gallon in afternoon trade, while October heating oil futures added 2 cents to $2.10 per gallon but October natural gas dropped 2 cents to $3.84 per million British thermal units.

The US Energy Information Administration issued a global oil consumption forecast for 2011 that was revised downward slightly from last month’s outlook, saying that global consumption will rise by 1.4 million barrels per day next year, slightly lower than last month’s prediction of a rise of 1.5 million barrels per day next year.

The EIA left its forecast for consumption this year in place, saying that consumption will rise by 1.6 million barrels per day, while it also said that declines in global inventories will support prices.

Analysts expect US inventories of crude oil and gasoline to have dropped slightly last week when the EIA issues their weekly US stockpiles report tomorrow, a day late due to the Labor Day Holiday last Monday.

The retail price of a gallon of regular unleaded gasoline in the United States was down slightly overnight to $2.68 per gallon on average nationally.